Handbook on the History of Economic Analysis Volume II

Handbook on the History of Economic Analysis Volume II

Schools of Thought in Economics

Edited by Gilbert Faccarello and Heinz D. Kurz

Volume II contains entries on the major schools of economic thought and analysis. These schools differ with regard to their 'vision' of the working of the economic system, the major forces and interactions that shape its path, and the policy recommendations proposed. At any moment of time, several such schools typically compete with one another, striving for dominance within the economic and political discourse. Each Handbook can be read individually and acts as a self-contained volume in its own right. It can be purchased separately or as part of a three-volume set.

Chapter 5: Mercantilism and the science of trade

Thierry Demals

Subjects: economics and finance, history of economic thought


Gathering under a single name the great diversity of authors who wrote on economic matters from the early seventeenth century until the second third of the eighteenth century seems to be an impossible task. However, this is what has been done in the past. Many economists and economic historians have called these writers “mercantilists”, a generic term which gave rise to discussions but was widely adopted (see Wilson 1957; Herlitz 1964; Rashid 1980; Magnusson 1994, 1995, 2008; Pincus 2012; Stern and Wennerlind 2014). The history of mercantilism appears as a series of “disconnected still pictures” (Herlitz 1964: 101): initially considered as an inconsistent doctrine, mercantilism was later presented as a coherent system and then sometimes as an imaginary or uninfluential construction. The debate on mercantilism has been deeply entangled in the discussion on “liberty” versus “protection”. Many scholars questioned the traditional boundary delimited by Smith’s work and corrected “Smith’s caricature” of this literature (Rashid 1980: 5), adding to the picture “late” or “moderate” or “liberal mercantilists” (see Ingram 1888; Cossa 1892; Schatz and Caillemer 1906; Grampp 1952; Hutchison 1982). The fact remains that to some extent scholars accepted the designation, the description suggested by the writings of Smith, Quesnay or Mirabeau (below), and the subsequent idea of a more or less common body of doctrines beyond the particularities of national economies and commercial empires. For most of them, mercantilism was a truly modern policy, not a remnant of the Middle Ages, and a body of doctrine sufficiently homogeneous and unified to be compared to that of laissez-faire. What unified the doctrine was the great emphasis put on foreign trade as a means of national enrichment and an expression of rivalry between nations, leading to a discussion whether the wealth of a nation tended towards a limit if it came only from internal resources, namely, land and raw materials, and whether this limit could be pushed as far as possible with the deployment of labour.

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